AVON AIMS FOR INNER BEAUTY
Byline: Andrea M. Grossman
NEW YORK — Fresh from an Avon sales meeting where 200 Avon divisional managers were briefed on Avon Wellness — a new collection of health and wellness products — Scott Schlackman is energized.
Schlackman, vice president of Avon Health & Well Being U.S., said he’s never seen such enthusiasm about a new sales opportunity. “I’ve seen sales force excitement in my years, but I have never seen a sales force so pumped up. They understand what Avon Wellness will do for their business, they understand the vision.”
As previously reported, Avon is taking its 115-year focus from how a body looks to how a body feels with the May launch of Avon Wellness, a business Schlackman projects to generate $50 million in first-year global sales.
Avon Wellness consists of a variety of product categories, offering wellness solutions ranging from nutritional supplements, aromatherapy products and at-home exercise equipment.
VitAdvance, the nutritional supplement arm, is expected to generate the most interest among Avon consumers. Through a partnership with Roche Consumer Health, Avon Wellness developed a line of multivitamins and 19 nutritional supplements targeting such women-related issues as bone health and stress support. Beginning in May, nine women-focused multivitamin and supplement stockkeeping units priced between $8.99 and $9.99 will be available. From July through November, 10 additional sku’s will launch targeting both women and her family, priced from $6.99 for a children’s multiple vitamin to $9.99 for prostate, menopause and cold-season supplements. The idea behind the delayed launches is that women, who in most cases are the primary caretakers of the family, take better care of others when they themselves are practicing a healthy lifestyle. “Avon defines wellness as the total state of well-being for physical, spiritual, mental health, and the synergy of them all,” said David Cross, executive director, Global Health & Well Being.
Avon relied heavily on Roche’s expertise of nutritional supplements for VitAdvance. However, the company worked closely on the strategic side.
“[The purpose] is to help simplify people’s choices to fit their lifestyle and their stage in life. Many [companies] are trying to define wellness but we are really able to do this because of our support for women,” Cross added.
Along with VitAdvance, two other divisions comprise Avon Wellness.
VitaTonics is a collection of aromatherapy products. Fragrance sprays, shower gels and cleansing soap tablets are offered, each available in three fragrances. Price points start at $4 for a cleansing soap tablet and go to $14.50 for a 1.7-oz. fragrance spray.
Partnerships with health-focused suppliers bring a host of products under the Body & Mind unit of Avon Wellness. Bally Total Fitness, for example, has been brought aboard for the production of at-home fitness equipment. Ryka, a footwear company, has been tapped to supply power-walker sneakers. Stassen Teas, a tea supplier, has agreed to offer a range of herbal teas. Videos, books, tapes and “healing” magnets are also offered under several partnerships with various suppliers. Prices range from $2.99 for a set of 16 teas, to $12.99 for a talking pedometer, to $22.99 for a Bally’s exercise ball.
Avon Wellness will be sold exclusively through its representatives; Avon’s Web site, www.avon.com; its 50 freestanding kiosks, and on its toll-free phone number. By the end of 2001, Avon Wellness is expected to be in 15 markets with more than 150 different products. Five-year global sales estimates are in the $200 million range.
Avon enters the wellness category at a curious time. According to Information Resources Inc., overall sales of supplements for 2000 fell 1.2 percent, the first recorded fall off in several years. In 1999, sales grew 12.6 percent, and in 1998 sales grew 59.4 percent, according to IRI.
“It’s an auspicious time for Avon to get into the business,” said Frank Lampe, vice president and editorial director for Natural Business Magazine. But the higher margins generated by the nutritional supplement industry will allow Avon “to get by on lower sales volume,” Lampe said.
Scott Van Winkle, an analyst with Adams, Harkness & Hill, explained that despite the slip in category sales, Avon looks to gain supplement sales from their existing customers who are currently buying supplements somewhere else. “It doesn’t matter if the category’s sales are up 2 percent or down 2 percent. Their customers are buying these products, but not from them,” Van Winkle said. He added that the personalization an Avon representative would offer to the confusing supplement category will “bring Avon to the rescue.”
Cross noted that the growth of the supplement industry “has slowed in the last several years but there are clearly segments growing pretty distinctly.”
Avon polled their 500,000 U.S. representatives and found that 92 percent take multivitamins. “They are looking for advice to take better care of themselves, and the trust we have with our reps puts us in a very unique position,” said Schlackman.
Plus, Avon can look to its other core markets to build the business. “The [international] market is growing, and the usage rate there is low compared to the United States,” said Schlackman.
A test-launch in Argentina two years ago proved the nutritional supplement segment might meet success in other markets. “The idea of a separate catalog exclusively focused on wellness has been positively received, too,” Cross added.
Cross speaks of the newly created Wellness Magalogue, a brochure to be issued every six weeks promoting the Avon Wellness collection. Its inaugural May issue is 32 pages and will have a circulation of 15 million. The Magalogue is also filled with “consumer sound bites” on health and wellness issues. Serena and Venus Williams will help promote it with a column in each issue titled, “Sisterly Advice.”